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New Unfair Dismissal Rules

The Team - Tuesday, March 09, 2010

It's a common misconception that dismissing employees is somehow illegal. This has never really been the case. It has always been possible for employers to sack employees - it's necessary for the process to be fair and reasonable and not harsh. No matter what the law says from time to time (and successive governments will continue to change the rules) employers should follow some simple processes:

    • Make sure you employ the right people in the first place!
    • Make it clear there is a probationary period for new employees
    • If an employee is not performing, talk to them about your concerns and set out clear steps they must take to improve (including a time frame) - document this discussion and ensure the employee has a copy of these notes
    • If things don't improve, issue the employee with a letter of warning referring to the previous discussion, noting that improvements have not been made and making it clear that if things don't improve that the employee may be dismissed. It is essential that you make it perfectly clear that dismissal is a real possibility.
    • Ask the employee to acknowledge the letter in writing (they can initial a copy) and invite them to respond in writing if they so wish.
    • In the absence of an improvement, then one more "warning letter" may be appropriate making the dismissal and the timing clear, and then proceed to dismissal.

 Employers often ask about time frames and there are no hard and fast rules for this - it really depends on the nature of the job. If the employee is flipping burgers then one could reasonable expect an improvement in performance within the hour! However, if the employee is a divisional manager it may take much longer for improvements to manifest. You have to judge what is fair and reasonable in the circumstances.

 On 1 January 2010 the new law came into effect and there are some new rules applying to small business (broadly defined as a company employing less than 15 employees). These rules are known as the Small Business Dismissal Code. Under this code there is:

  • a minimum employment period of 12 months instead of 6 months (employees can’t make an unfair dismissal claim in this 12-month period)
  • a simple Fair Dismissal Code to help employers ensure dismissals are not unfair
  • a specialist service for small and medium sized businesses from the Fair Work Ombudsman.

There is a lot of useful information on the Federal Government's Fair Work Australia website (www.fairwork.gov.au) There’s also a helpful checklist that small business employers can follow to ensure the dismissal is not unfair and you can download this from the Fair Work site.

If any small business owners want help with employment, remuneration or dismissal procedures drop an email to team@nowbusinessmastery.com and we'll show you how.



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